THE NUMBER of academics and members of Economics for Society group, among them four former Bank of Thailand governors, who oppose political parties dominating the central bank has grown to 830 with the meeting to select the chairman and two qualified members of the central bank board taking place on Monday Nov. 11 after a weeklong postponement, Naewna newspaper said today (Nov. 9).
In the group’s third statement issued today they urged the selection committee to adhere to the principle of “preserving the independence of the Bank of Thailand” after some groups close to political parties had voiced disagreement to their stance.
On support for Mr. Kittiratt Na Ranong to become the board chairman, the academics and their backers said they are not interested on whether he is an excellent person or not but that whoever assumes this key post should not have close political ties and must never have caved in or shown an intention to allow Bank of Thailand to implement monetary policies as desired by political parties.
The academics said they did not intend to single out any individuals, be it Kittiratt or Mr. Pongpanu Svetarundra, but are concerned about political ties while pointing out that the more capable this person is the more ways he/she could use expertise and skills to interfere and dominate the central bank.
Secondly, on the argument that the Bank of Thailand should not be independent from politics because it has made mistakes in the past, particularly the Tom Yum Kung crisis in 1997, the academics said this standpoint is not logical because political interference too could have both good and bad effects.
Empirical data from experience around the world showed that political intervention often causes more harm than good, they mentioned.
The principle of central bank independence, which is adhered to around the world, will shore up the credibility of the central bank, which means the credibility of monetary policy implementation. If the central bank is not independent and can be controlled by political parties, implementation of monetary policy will not be reliable because there are many variables, pressures, or incentives in politics, which are difficult to predict.
Uncertainty is detrimental to the economy because it creates policy risks that greatly affect the business sector. Most importantly, if the credibility of monetary policy is lost, the ability to keep inflation within the target range will also be lost. As a result, inflation may soar and be difficult to control which will have a severe negative effect on the economy.
CAPTIONS:
Top: Bank of Thailand Learning Centre. Photo: Central Bank
Front Page: Bank of Thailand building. Photo: Naewna
Also read: Academics, former BOT governors protest political parties dominating central bank
Somchai: Kittiratt unsuitable for central bank board chairman
Ageing society is a ticking time bomb, invest in technology: Thanathorn
Ultra-conservative party drumming up support to scrap Thai-Khmer MoU
Anutin heading to Koh Kood amid Thai-Khmer MoU fears
Director clarifies after social media storm over a cat
